Justin Sun Seeks Sanctions in $45 Million World Liberty Fraud Case

Sanctions Motion Over a Late UAE Disclosure

Tron founder Justin Sun asked a US federal court on Monday to sanction World Liberty Financial, the Trump family's crypto venture, arguing that the firm revealed its United Arab Emirates ownership only to escape his $45 million fraud case. Sun confirmed the step in a post on X, writing that his lawyers moved to sanction the company for failing to disclose, until months into his litigation, that it counts as a citizen of the UAE. Sanctions in this posture would penalize the firm for the late disclosure and could shape how the court weighs the rest of its filings.

@justinsuntron · X post

A post on X.

View on X

The case decides whether Sun recovers his frozen WLFI tokens, coins that give holders a vote in the project, and it tests whether the company can freeze any holder's coins at all. The ownership record sits at the center of that question. World Liberty's first court filing on ownership named only itself, a Florida company. Less than a week after an August hearing went partly against the firm, it listed 22 members, which Sun says span Florida, Delaware, Puerto Rico, and the UAE. That matters because a company takes the citizenship of every owner, and federal courts generally cannot hear a foreign investor suing a foreign company. "World Liberty was proudly American when it was selling tokens," Sun claimed on X. "It discovered its UAE roots only when it needed a way out of an American federal courtroom." The firm's lawyers say they learned of the UAE link only after the filing, and Sun adds that World Liberty has refused to explain the change.

@justinsuntron · X post

Claimed on X.

View on X

A $500 Million Stake Drew Washington's Attention

Sun positions himself as one of World Liberty's earliest large investors, and the firm's ownership structure had drawn scrutiny in Washington well before Monday's motion. Earlier this year, Aryam Investment bought 49% of World Liberty for about $500 million; the Abu Dhabi group is reportedly backed by Sheikh Tahnoon bin Zayed Al Nahyan, the UAE's national security adviser. In June, five Senate Democrats demanded hearings into that stake. An August investigation traced the largest position in a Trump-linked stablecoin bank to an Abu Dhabi power broker, keeping the ownership question firmly in the public record.

The sanctions motion lands on a wallet that has been frozen since before Sun sued in April. His crypto wallet held about 2.9 billion WLFI at the time of the filing, a position worth roughly $150 million at the current price of $0.05111. The tokens sit at a crypto wallet address whose private key Sun still controls, but the freeze blocks any transfer while the case runs. World Liberty has called the freeze a routine security step, and it sued Sun for defamation in Florida in May. The firm has offered no public response to the sanctions motion. Once the judge rules on sanctions, Sun plans to refile in California state court, which pushes back any ruling on whether the freeze was lawful in the first place and means the ownership question outlives the federal docket.

A Jurisdiction Fight With $150 Million Locked

The sanctions motion is a procedural strike, but it aims at the issue that decides the case: whose citizenship sits behind World Liberty. If the judge finds the 22-member list was assembled to manufacture foreign status, the dispute may leave federal court entirely, and the record on the late disclosure travels with Sun into California. If the motion fails, the case returns to the merits of the freeze itself. Either way, roughly $150 million in WLFI stays locked, leaving Sun without exit liquidity on a position he has held since the token sale, while the firm faces no public deadline to explain how one listed owner became twenty-two.